Follow us to get publishing news, scheduling updates, author information and to talk directly with authors during our live programs. Twitter. Com booktv. A particularly best known amongst his Popular History is his book, taking away the latter, and bad samaritans, and 23 things they dont tell you about capitalism. Among other things one of the achievements of the works end of the work of hajoon is that it is a brilliant job of history, the development of knowledge. And how [inaudible] and the government in the process and makes days debate on development policy. And what are the historical lessons of development. Its also highly relevant for today and its great we are bringing together books, history as well as its relevance to policy options today, back along with the lessons of two of my favorite pieces of research. Hajoon teaches at cambridge university, is giving us a book talk as you know and then afterwards we will have the pleasure of best known for probably best known for his work on poverty. But like hajoon is very eclectic and wideranging and also shares profoundly the same way [inaudible] so thank you very much, hajoon. Without further ado, as i said for the question please raise your hand and to my . No, this end of one. I also want to welcome professor, president of the initiative policy dialogue. Also associated with ipd in various capacities. And thank you for organizing this event. Without further ado, thank you so much, hajoon, for coming in and giving us this talk. Thank you. Thank you, akbar, for the generous introduction. And thank you, everyone, for coming on a very nice evening. It looks like a perfect weather for a stroll, but you chose to come and listen to me so i will try to make it worth your while. While most people agree that economics is very important, after many things that happen in the economy, really important bearings on our life were ever we are whatever we do. I mean, these things affect our wages, our working conditions, pensions, to pay bills and what have you. But despite this there is widespread perception among noneconomists that economics is too complicated and, therefore, better left to the experts. This is quite widely accepted, you know, when economists economies like greece and italy got into trouble. These economies were told to a point some economists as the prime minister, to really sort this problem out just by the fact that these were people not elected representatives of the people. But why isnt like that . So when you think about it its very interesting. People have very strong opinions about all sorts of things. You know, gay marriage, Climate Change, Nuclear Policy decisions. Without having any Technical Expertise in these areas. I have my strong view on American Foreign policy, what do we know about this . I took one course in religion back in 1983 when i was an undergraduate student in south korea [laughter] and a crusty old professor who taught us is a textbook from the 1960s, yes . So what little did i know come from half a century ago. But then whenever these topics come up, i spout my opinion. Im sure you always are the same, whatever the topic is. So what is economics a different . Its actually a very complicated thing, but the short answer is that my professional colleagues have been successful in associating the rest of the world that the stuff is so difficult that you wouldnt understand even if they bothered to explain it to you. [laughter] i happened to strongly disagree with his view. And my previous book that akbar mission, 23 things, i actually wrote a short suicide note by saying that 95 of the economics is commonsense but its made to look difficult with the use of mathematics, graphs, statistics. And even though remaining 5 , if not in all practical details, someone could explain in a good way which is what i tried to do in this book. This is a cover of the book at actually became not only in the uk on a different format. This is pocketsized paperback edition, exact same content, just different publisher, different types of insulin. And, indeed, a note to make this book accessible compared to make economic accessible to noneconomists, i really pull all the stuff i can. Theres mary poppins, which is start of the chapter on final. The matrix, my fair lady, the simpsons. At least ned flanders, my favorite simpsons character. [laughter] so i really try. I dont know how much i succeed but i really try, but dont get me wrong. Being accessible doesnt mean that im trying to give you some baby versions to a dummies guide, you know . Seven things that you know about inflation, you know, three things that you didnt know about this and that. [laughter] i do not do that because i take my readers very seriously, and i really do talk about, i mean, i really do talk about all kinds of fundamental nation, what is economics . Can it be science . Can we get rid of politics from economics . What are the ethical foundations of economics . And many things. So in doing so the book tries to attempt, i tends to offer something completely different ask the British Comedy group monty python used to say. Lets see how different this is. Well, this is the table of contents, and if you read through them, apart from some kind of fancy titles that i used to draw your attention, you will notice that are actually quite a lot of things that you dont normally see and economic books these days. So as i mentioned earlier in chapter one i discussed the definition of economics. In chapters two and three history about capitalism. Number two is a short snapshot version. Three is a long narrative. Number four, i discussed different ways of doing economics if you like. And then in terms of different topics i touch on topics that are largely if not completely neglected in economic discussion these days like production in Chapter Seven and worked in chapter 10. Im going to talk to but these issues in summer detail later, so lets leave it at that. Another thing that makes this book different is that they give my readers a lot of what i call real life numbers. Economics is supposed to be numbers subject. And, indeed, if you read, i ask about the economy, economic issues, you will see a lot of numbers. But thats not to say that economists actually know this real life numbers. It is quite common these days for someone with a degree in economics without knowing what the gdp or Gross Domestic Product that is roughly [inaudible] during a particular period, what does the gdp of their own country is. Even less how deep the World Economy is. How much of that is produced in china or the United States. Of course you dont need to know these numbers. You need to know only one thing, hoover. [laughter] but my view is actually you need to know some of these numbers. And lets you know some of them, if you have some fuel about what they are, about whether you should look like and so on, you didnt even know what to look for. And also if you brought ideas about these numbers, you can develop very distorted views of the real world. Let me give you one example. In the days of euros on crisis when, especially greece was a problem, there was this widespread narrative, mainly coming out of germany, which basically argued that greeks are in trouble because they are lazy. They walk like a greeks and they spend like germans. [laughter] this cannot be done. So you need to buckle up and work harder your now these people would not have been able to say that if they went to the oecd website and looked up the annual average working our of the citizens of oecd member countries. And there they wouldve found that greece actually worked 30 longer than the germans, and 40 longer than the dutch who happened to be the laziest people in the world. [laughter] no, no. I like it, you know . Why should you work all the time, you know . You should enjoy your life. I totally approve of the dutch efforts, but the fact is a very playing. I mean, the greeks work far longer than the supposedly hardworking northern europeans. In this country theres another very interesting misconception about the mexicans. The lazy latinos. Always say my and do not work hard. Do you know they were 25 longer than the americans . Actually mexicans have the longest working hours in the oecd. A few years ago they even beat my fellow South Koreans. They are the hardest working people in the oecd, and what are we talking when we say mexicans are lazy . Well of course that example shows countries, greece and mexico, have problems but the problems are not that of work ethic but that of productivity. To fix the Greek Economy they should talk about things Like Research into the, worker skills, infrastructure instead they started getting more lectures on why the greeks should work harder. So when you get at some of these basic numbers wrong, you can develop a very strange idea of the world. Of course emphasizing the importance of these real life numbers doesnt mean that you should take numbers without any kind of question. Because in economics from most numbers have to be [inaudible] and sometimes a battlefield because theyre so duty as you need to [inaudible] take this quote from the famous author, something of a scientist wrote the book on the theory of color and saw. And he wants it, and i really like this quote, that everything factual is already a theory. All \facts fax actually constructed on the basis of certain u. S. Consumption about the world. The way this is clearer is economics. Take the case of gdp that i mentioned earlier, Gross Domestic Product. They do not include unpaid household work that people do, mostly women. This means that, you know, this work in those countries are about 30 of National Output is not counted and, therefore, miss contribution to the economic growth. When you say that some people say no, these things are quite difficult to estimate. You can estimate it, Domestic Worker nurses taking care for sick people. You can, and also the thing is that they are all out on a limb to calculate numbers for other things that are not marketed. If youre living in your old house, they actually interviewed, the technical word, the value of your house to your income by assuming that youre actually paying rent for yourself. You can say, well, this apartment would have cost 3000 a month. This guy went out in the market and we did it so we added 3000 to his income. When you do that with houses, why do not do that with womens work . You can argue but the point is that these numbers are not as objective as the weight of an elephant or length of a string. Although if you ask a scientist they will say even those numbers are not [inaudible] i have a brother who lives for science. He will attend to that. Well, i can go on for example, but lets talk about the topics that i raised earlier. First of all, the definition of economics. Did you ask people what is economics, most people who are not economists actually answer, well, the study of the economy. Chemistry is the study of chemicals. Socialism is the study of society. Economics must be the study of the economy. Unfortunately they are wrong. Well, at least according to some of those Popular Economics books. Actually does signs of everything. Well, yeah, some people [inaudible] think this about almost everything, not really everything. [laughter] now when i give this do not economists, they say, jesus, the economy must be in a massive megalomania. These are the people who couldnt even do their own show, they couldnt even explain the economy. [laughter] and they think they can explain everything . Well, i can tell you, its not actually a simple case of megalomania. Actually its more commentated than that. Economies have come to define economics as the science of everything because they have actually worked with a definition of economics that ultimately leads to that thinking. And that definition was famously provided by the professor used to teach in London School of economics in the mid20th century, and he basically defined economics as a science of rational choice. And when you do that, you are defining economics by its analytical ability, rather than its [inaudible] that is the economy. And when to think about this, this is something very unique. Because in all of the subjects, the subject is defined by the objective. Chemistry, chemicals, geology, sort of origin, the structure. Biology, living things. But in economics youre defining it in terms of balance which is very unique. But why should it be like that . Is exactly because, when you open a book like freakonomics you find that everything that is there really is not about economic issues. Its about japanese sumo wrestlers. Its about chicago drug dealers. Its about british people being horrible to each other, pretty sure. [laughter] is nothing about what other people, no economists think should be and then economic book. Im not saying that you shouldnt necessarily discuss ordinary economic things as an economist but theres something very strange here. In contrast to go to biology department, there are people doing research with all kinds of there are some people arguing dna analysis, others doing anatomy, others studying bone structure who are almost like structure engineers. People doing nasty experiment with rats. People building motors of animal behavior. And some people go and sit in the jungles of burundi with the mountain gorillas and record what they do. And they are all called biologists because biologists are smart enough to know that living organisms are complex. They cannot be understood only at one level. No biologists say i study dna, and thereby i study something more fundamental and, therefore, people sitting in the jungles of burgundy are idiots. Ass but this is what economists do. [laughter] economic profession today, if youre the cleverest youre supposed to do something that is totally unrelated to the real world. You do basically mathematical motors of things that have nothing to do with real world like [inaudible] what have you. If youre less clever you become [inaudible] if youre even less clever, you do Development Economics like i do. [laughter] if youre even worse either, economic historian. Historian. [laughter] if you are at the bottom of the barrel, you go on factories serving managers. This is very strange hierarchy. Which do not exist, doesnt exist in real science like biology. Anyway, so my contention is that economics should be defined not by in this weird way, but what objects like all of the subjects. Its definition should be that it is study of the economy, or how we produce good sense services, how we tested the incomes generated in the process and how we exchange those goods and services that have been produced. Now, one important consequence of the classical definition of economics is to make them believe there is only one wide way of doing economics, or actually one best way. For in this book i devote one long chapter, chapter four with at least nine different major school of economics, or a lot more if you include smaller schools, a lot more if you break the bigger schools into smaller schools, but at least nine, each with its own unique strengths and weaknesses. And the interesting things that fall free market because the longer three different types. The classical come the new classical and the austrian. And day, even though they defend the free market, they do it all in very different ways. So the classical economists like adam smith, they theorized the economic clearly different from the neoclassical economist but because they have basically classbased theories. There were really no individuals in classical economic theory but for the capitals, the worker and there was the landlord. They basically tried to understand how economies get involved in the interaction between these three different groups. Was neoclassical economists put emphasis on individuals. Very different theory. One thing that you have to remember is that neoclassical economics is not the same as free market economics. Neoclassical economics contains this theory, theory of market failure. If youre applied quite consistently you can actually just by huge range of government intervention. But there are neoclassical economist who are on the left of the political spectrum who criticize the free market policy. Dont miss understand is, but it is true that more neoclassical economists are in favor of free markets and their theory is very different from the classical theory, even more different is the austrian theory represented by people like friedrich von hayek, and they see the world critically different from the neoclassicals. The neoclassical justification of free market is that people are rationale. They know what theyre doing so leave them alone. This is a simple vacation, but not too bad. The austrian justification of free market is no one really knows whats going on, so how do you think government knows better than the people . Because austrians believe that the world is full of uncertainty, rationality is very limited, a lot of our behavior is based on blindly following tradition what they call, rather than rational calculation. This is a completely different theory. If you have three different ways of justifying the free market, how can you say its a science like physics . Its not possible. But not to create division our conflict her i actually can handle hard i studied all these schools, to some depth. I mean, some more than others, but i start out to illustrate a point out that the ive read as much frederic von hayek as ive read karl marx. In the end i do not agree with either of them, but these are both profound thinkers. And i really believe that we need all this Different Schools of economics to enrich our understanding of the economy. As i already illustrated, they theorized, their interest in different things. Economics of exchange. Whereas the classic goals, theyre interested in production. They have different political values. Hayek and the austrians think the most important value, the most important political value is to protect the rights of individuals to use the property they own with a maximum degree of freedom. This is why hayek, because for him, the previous regime was undermining the free society by nationalizing access and restricting [inaudible] for him, this paramount out you had to be saved by other means, including military coup detat. So, you know, theres all kinds of different assumption, and different approaches and, therefore, they are doing different things. They may become in one context more than another. So in my view we need all of these theories working together to bridge or understanding of the economy and to illustrate this point i talk abou